As the conflict in eastern Ukraine appears frozen on the ground, leaders in Kiev and among the Russia-backed rebels are offering competing versions of the status of the separatist-held territories. Read More »

On its way to eventually joining the European Union, Serbia needs heavy measures to rein in its budget deficit and carry out an overall social system overhaul.

Mr. Krstic wanted to push forward a program including severe public sector wage and pension cuts, layoffs and the adjustment of electricity prices to market levels, but Mr. Vucic thought these would hit citizens too hard now, state news agency Tanjug reported.

Acting Minister of Finance Dusan Vujovic, the successor of Mr. Krstic, on Monday said reducing public sector wages and pensions this year by 10% would be reasonable. Speaking on state television and cited by the finance ministry website, he said that it shouldn’t be just state employees and pensioners bearing the burden of fiscal consolidation targeted in 2017, but tax revenues should also be increased in areas now subject to tax evasion. Read More »

BUDAPEST–OTP Bank, Hungary’s largest bank by assets, is seeking further acquisition targets in Croatia, Serbia and Romania, the group’s Chief Executive and Chairman Sándor Csányi said Friday.

He didn’t name any targets but noted that it has identified potential ones in Serbia just as several banks are leaving the country, but not in Romania.

“Romania has always been a strategic point, with the economy developing and per-capita gross domestic product increasing faster than the European Union average,” Mr. Csányi said at a press conference after the bank’s annual general meeting.

OTP closed the acquisition of Italian banking group Intesa Sanpaolo’s Croatian arm Thursday but Mr. Csányi said he’s on the lookout for gaining further ground in the newest European Union country. Read More »

GODOLLO, Hungary–Poland, the Czech Republic, Slovakia and Hungary–which make up the group of countries known as the Visegrad4–said Thursday they strongly support including western Balkan countries in the European Union to ensure stability in a region that is often torn apart by war and ethnic conflict.

“Some may say the train [of EU enlargement] is moving too fast or some may say it’s moving too slow but the main thing for the V4 is that the train is moving,” said Hungarian foreign minister Janos Martonyi, who hosted the event.

The V4 said EU enlargement is able to stabilize and transform the region for the benefit of all its partners while cautioning that membership should be conditional on the individual performance of those wishing to join.

Thursday’s meeting, which was also attended by high-level government representatives from Italy, Turkey, and Austria, was mainly intended to lend support to the Western Balkan countries of Montenegro, Serbia, Kosovo, Macedonia, Albania, Bosnia and Herzegovina in their efforts to accede to the EU, and to discuss further cooperation among some of the countries present in energy, infrastructure and culture.

Croatia became the EU’s most recent new member when it joined on July 1, taking the total to 28.

EU enlargement “is far from being on an autopilot. Brussels needs to seriously take into consideration concerns of the citizens of the EU,” said Stefan Fule, the EU’s enlargement commissioner, who was also present at the meeting the. Read More »

With low interest rates making new debt sales attractive, governments in Central and Eastern Europe are busy raising cash for next year, with investors looking favorably at their sovereign bonds.

Slovenia, Romania, and Bulgaria all saw strong demand for their papers in the international bond market over the last month as investors were happy to increase their exposure outside the center of the euro zone’s debt crisis.

Slovakia followed with a debt sale Wednesday, the same day Serbia embarked on a series of meetings with investors for a potential dollar-denominated deal. Poland sold more than planned in its zloty-denominated 2018 bonds on Thursday, funding its 2013 borrowing needs.

Slovakia sold bonds at well below the borrowing costs of stressed fellow euro-zone members Spain and Italy. Slovakia, a euro-zone country that has so far escaped the fiscal problems plaguing its western peers, borrowed 1.25 billion euro ($1.6 billion) worth of 10-year bonds for a yield of 3.421%.

Italy’s 10-year bonds yield around 5%, and Spain’s 5.8%, according to Tradeweb data.

“Cash is cheap, the future is uncertain at this point, and I wouldn’t be surprised to see anyone coming to market,” said Tim Ash, analyst with Standard Bank. Read More »

In a country that has experienced as much profound change in the past quarter century as Serbia, it isn’t surprising that the political makeover has become something of a local art form, as office-seekers try to keep up with shifts in public mood.

Take the case of Tomislav Nikolic, the challenger to pro-Western incumbent Boris Tadic in Serbia’s presidential election runoff set for this Sunday. When he last ran for the post in 2008, Mr. Nikolic represented the vehemently anti-EU and ultranationalist Serbian Radical Party. Now he says EU membership and warmer ties with Serbia’s neighbors are the country’s only rational choice.

In written responses to questions from The Wall Street Journal, Mr. Nikolic said: “Three and a half years ago, I took an irreversible decision to leave those old policies behind and totally devote myself to” the Serbian Progressive Party, which he helped found and now heads. “I am always thinking about and focused on the future. I don’t dwell on the past.”

But others do. And the sincerity of Mr. Nikolic’s message has been attacked by his opponents and greeted with skepticism by some voters and political analysts. Recent surveys by pollster Ipsos Strategic Marketing show that Mr. Nikolic is likely to lose to Mr. Tadic on Sunday. Those who say they will vote favor Mr. Tadic by 58% to 42%, Ipsos said. Read More »

International policy makers and banks active in central and eastern Europe have agreed a set of measures designed to protect the countries of central and eastern Europe from the euro-zone’s banking problems.

Meeting in Brussels Monday and Tuesday, representatives of governments, central banks, regulators, international financial institutions and banks active across Europe revived the Vienna Initiative, a successful 2009 effort to stop a rapid withdrawal of capital from CEE in the wake of the collapse of Lehman Brothers.

Under Vienna 2.0, as it is known, banks pledged to maintain lending levels in countries that are receiving help from the International Monetary Fund. They include Bosnia, Kosovo, Romania, Serbia, and Ukraine. Read More »

The Hungarian government remains committed to the admission of new countries to the European Union and will continue to push for the bloc’s enlargement, the country’s foreign minister, Janos Martonyi, told The Wall Street Journal.

“We are firmly of the belief that the reunification of Europe must be completed—because it isn’t done yet,” Mr. Martonyi said in an interview.

Hungarian diplomacy celebrates Croatia’s accession next year as one of the biggest successes of its EU presidency in 2011. The country also ardently advocated Serbia’s case, which received candidate status at the start of March. Hungary borders both countries. Read More »

After successfully luring Italy’s Fiat, Serbia hopes to attract another car maker to invest on its soil in the next two years, hoping that its European Union membership prospects and a joint venture with the Italian car maker to build a new family car will help boost foreign investments, Serbia’s President Boris Tadic said this week.

“I hope to announce something by 2014,” he told The Wall Street Journal after celebrating the unveiling of the new model, the 500L.

Serbia is promoting itself as a regional industrial hub in the Balkans. Based in the town of Kragujevac, the EUR1 billion plant will make the 500L model. It will start production in May to have the 500L in showrooms across Europe by the fourth quarter. By 2013, it will be shipping it to the U.S. Read More »

About Emerging Europe

Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.